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South Korea is moving ahead with a bill that will create a legal basis for cryptocurrencies, Korea JoongAng Daily reported.
The bill, which will categorize cryptocurrencies as digital assets, has been passed by the National Assembly’s national policy committee on Tuesday, Nov. 26.
It will require crypto businesses to report to and register as digital asset businesses with the Financial Services Commission’s (FSC) Financial Intelligence Unit (FIU). In order to be approved as a digital asset firm, they would also need to acquire an Information Security Management System (ISMS) certificate from the Korea Internet and Security Agency (KISA).
Those businesses that the aforementioned criteria or are found operating bank accounts with fake identity will not be approved, the report noted.
Importantly, businesses engaged with cryptocurrencies will be required to ensure the prevention of money laundering activities and establish ground rules for financial transactions. They would be required to establish their own monitoring systems to adhere to the Financial Action Task Force (FATF) standards. Those who fail to do so will be penalized.
The FSC said that the legislation will help boost transparency in cryptocurrency-related activities and legitimize crypto investments.
The bill now needs to be passed by the judiciary committee and on the main floor of the National Assembly, following which it would go into force after one year.
